This outstanding new book provides the most detailed and comprehensive evaluation of water reform and water sector performance from the perspectives of institutional economics and political economy. Skilfully integrating institutional theory with resource economics, and set against an exhaustive review of the theoretical and empirical literature, the authors develop an alternative methodology to quantitatively assess the performance of institutions in the context of water. This methodology is built on the principle of 'institutional ecology', the 'institutional decomposition and analysis' framework, and the 'subjective theory' of institutional change. Using this new methodology, plus information collected through an international survey of 127 water experts, the authors present a detailed empirical analysis of the process of institution-performance interaction in the water sector.